Here, we’ve outlined several ways you can potentially reduce your CGT liability. But before we dive in, remember to seek guidance from a qualified financial planner or tax planning specialist before you take any action. Tax rules are complex, subject change at any time, and specific to your individual circumstances.

Every UK taxpayer has an annual allowance when it comes to CGT. Known as the Annual Exempt Amount (AEA), this is the amount of gains you’re allowed to make each tax year, without having to pay any tax on them. If you exceed the AEA, you’ll only pay tax on the amount you’ve exceeded it by.

The AEA was reduced from £6,000 to £3,000 in 2024/2025. Even though the exemption amount is falling, it will still save you some money on your CGT bill. If you plan to sell assets, consider spreading the sales over multiple tax years to take advantage of each year’s allowance.

If you’re married or in a civil partnership, you can transfer assets to your spouse or civil partner without incurring any CGT liability. This can be especially beneficial if your partner is in a lower tax bracket or hasn’t used up their AEA for the year.

By transferring assets, you can effectively double your tax-free allowance and potentially reduce the rate of CGT you need to pay on any gains. Remember that the person receiving the asset will be liable for CGT when they eventually sell it, so plan accordingly.

If you’ve made capital losses on the sale of any asset, you can offset it against your capital gains and reduce your overall tax liability.

To claim a loss, you’ll need to report it on your Self Assessment tax return. Even if you don’t have any gains to offset your losses against in the current tax year, it’s important to keep track of them as they can be used to reduce your CGT in future years.

Investing in tax-efficient vehicles, like Individual Savings Accounts (ISAs) and pensions, can help you avoid CGT altogether. Any gains you make within an ISA or pension are exempt from CGT, making them ideal for long-term investing.

Other government backed investment schemes, like the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), or Venture Capital Trusts (VCTs), can also play a role for certain individuals because they offer tax reliefs, including CGT exemptions or deferrals. But because these schemes come with much higher risks than ISAs or pensions, they’re generally suited to more experienced and adventurous investors who have sufficient income to benefit from the tax relief available.

Regardless of the vehicles or tax wrapper, it’s important to remember that the value of all investments can go up as well as down, and you may not get back the full amount invested.

There are several reliefs available that can reduce your CGT liability. Some common reliefs include:

• Entrepreneurs’ Relief (now called Business Asset Disposal Relief), which can reduce your CGT rate on certain qualifying assets. If you’re selling all or part of your business, you may be eligible for it.
• Gift Hold-Over Relief, which allows you to defer the CGT until the recipient sells the asset. If you’re gifting business assets or shares in a company, you might be eligible for this relief.

As with all of the tips outlined here, a qualified professional will be able to help you identify whether you can access these reliefs.

Timing is crucial when it comes to minimising your CGT liability. As mentioned earlier, spreading your asset sales over multiple tax years can help you take advantage of your annual allowance. And because you can’t ‘roll over’ allowances from previous years, every year counts.

Also, if you know you’ll be entering a lower tax bracket in the near future, due to retirement for example, you might choose to postpone the sale of an asset until then.

In some cases, you may be able to defer your CGT liability by reinvesting the proceeds from a sale into a qualifying asset.

For example, if you sell a business asset and reinvest the proceeds in a similar asset within a specified time frame, you might qualify for Rollover Relief. This allows you to delay paying CGT until you sell the new asset.

It’s important to consult with a tax professional or financial planner to ensure you meet all the requirements for this type of relief.

Holding onto assets for the long term can help you reduce your CGT liability. That’s because assets held for more than a certain period may qualify for a reduced CGT rate or be exempt from CGT altogether.

For example, shares held in unlisted trading companies for at least five years may be exempt from CGT, under the Share Loss Relief scheme.

Be aware, though, that holding onto assets for longer periods can also expose you to market risks, which should be weighed against any potential tax savings.

As mentioned throughout, don’t underestimate the value of professional advice. Tax laws and regulations are complex, and they change frequently. A qualified tax professional or financial planner can help you navigate the intricacies of CGT and tailor a strategy that works best for your individual situation.